Sunday, April 2, 2017

Siphoning-off the gifts of the gods behind a cloak of Orwellian mind control

Above is a recent interview between economist Michael Hudson and Adam Simpson of the Next System Project, published on March 23, 2017 and available for downloading or embedding here. An edited transcript is available here on Michael Hudson's website.

This may be the first podcast on economic matters to mention Gobekli Tepe, the incredibly important archaeological site which provides evidence for the existence of sophisticated civilization predating ancient Egypt and Mesopotamia by many thousands of years (as many thousands of years as those civilizations precede the modern day) and that the commonly-taught paradigm of ancient human history is deeply and fatally flawed.

As it turns out, the ancient texts and myths of the world which appear to preserve knowledge going back to that time long before the civilizations of Egypt and Mesopotamia and ancient India and China (because the earliest texts of those ancient civilizations already use the same world-wide system) have a lot to say about economic and political matters, including the concept of credit and debt -- which Professor Hudson sees as the most critical issue facing economies today.

The concepts of credit and debt are actually crucial to economic activity, but the ancients clearly recognized that these financial instruments also have the capability of destroying society, and that like many other powerful tools they can be used for the benefit of others but they can also be used to beat down, oppress, and enslave others.

Professor Hudson describes a model of economic activity in terms of "circular flow" of production and consumption, but notes that while financial activities such as credit and debt can contribute to production, they can also fall into the category of economic rents which act to divert or siphon-off the means of living out of the circle of the "real economy" through activity which basically amounts to the collecting of tolls on the activity of others. Certain forms of interest payments on debt could fall into this category.

Professor Hudson explains that the most ancient evidence (as well as many ancient scriptures) indicates that the "host-destroying" potential these diversions from circular flow were well understood in ancient times, and that there were systems in place to mitigate this danger which can be seen in the periodic debt-cancellation practiced in many ancient cultures, such as we find in ancient Babylon under the code of Hammurabi (for instance), or in the Jubilee system described in the ancient Hebrew scriptures.

These debt cancellations did not apply to business debts, which theoretically contribute to the growth of the circular flow (and if they don't, the business which borrowed the money will generally disappear and the lender will lose the money loaned) but rather to personal debts, which have the potential to reduce individuals to slavery.

In the interview, Professor Hudson describes the rise of Rome as a military power was a watershed event which overthrew the more ancient system -- and that Rome was "the first society not to cancel personal debts." This situation eventually led to the feudalism of the Middle Ages, during which a majority of the population was reduced to serfdom while a small percentage of the population enjoyed unearned income in the form of economic rents.

The classical economists of the 1700s and 1800s sought to find ways to undo the conditions that led to serfdom -- and they did so primarily by focusing on the rentier activities that siphoned-off the wealth from the circular flow, including land rent but also financial activity including non-productive credit and debt. But, as Professor Hudson explains, by the 1890s the rentier interests launched an effective counter-attack, which included an aggressive campaign to depict rent-seeking activities as beneficial rather than detrimental to society and the economy.

This campaign continues today -- to the point that (as he explains in the interview), many people have no idea what the classical economists really taught, because their teachings are diligently kept out of economics departments in major universities, and to the point that (as he explains in a different interview) economics is deliberately mystified in order to make it more difficult for people to figure out what is going on.

In the preface to his most-recent book, Michael Hudson says that "today's vocabulary of Orwellian Doublethink and Newspeak dominates the mainstream media, the teaching of economics and even the statistical representation of how the economy works -- as if there is no exploitation, barely any economic rent (unearned income), and no quantification of capital gains derived farm asset price inflation [ . . . ]" and that the promoted economic models "exclude the political, environmental and legal ramifications of debt in today's rentier economies" (11). He wryly notes that the motto seems to be, "If thine eye offends thee, pluck it out" (found in Matthew 18: 9 and Mark 9: 47).

Recognizing that the actual language of economics has been hijacked in order to invert the teachings of the classical economists who wanted to free societies from economic rents, unearned income and parasitic wealth, Professor Hudson's new book J is for Junk Economics goes through the alphabet to explain the terms that promoters of this inverted system use "to increase their time-honored 'free lunch' at society's expense" (5) -- and to provide an introduction to the classical economic thought "from Francois Quesnay and Adam Smith to E. Peshine Smith, John Stuart Mill and Karl Marx to Michael Flurscheim, Simon Patten and Thorstein Veblen" and their recommendations for reducing the diversions of economic rent and thereby creating a more just and less oppressive society (12).

That this campaign of inversion has been incredibly effective is best evidenced by the popularity of the so-called "libertarian" model and the Austrian economists they revere -- including among those who recognize the deceptive, oppressive, and world-destroying aspects of the prevailing neoliberal model and who are therefore desperately seeking an alternative to the neoliberal world order.

As the entry for "libertarianism" in J is for Junk Economics notes (in part):

The aim of libertarian planning is privatization, leading to economic polarization, oligarchy, debt peonage and neofeudalism. What the libertarian (that is, financialization) argument leaves out of account is that taxing land rent and other unearned rentier income requires a strong enough government to rein in the vested interests. Opposing government has the effect of blocking such public power. Libertarianism thus serves as a handmaiden to oligarchy as opposed to democracy. 142.

The interview linked above also goes into this issue and the subject of the Austrian economists (note that based on some of his other interviews and writings it appears to me that Professor Hudson is more positive on the economic thought of Joseph Schumpeter as opposed to the two other primary Austrian economists, Friedrich Hayek and Ludwig von Mises).

The issue of privatization is a crucial aspect of the economic model of circular flow and diversions from the circular flow described in the interview and in the discussion above. The classical economists (and the activities of ancient societies) argue that the gifts of nature -- the land itself and the sunshine and the air and the mineral resources and the favorable ports and the fertility of the soil -- provide blessings that basically come from the gods, and that at least some of the surplus value they produce (over and above the labor and other costs required to grow the crops on the land or run the ports at the sea's edge) should be yielded back to the gods and ultimately back to the population in the form of infrastructure which acts to benefit the population at large.

Note that in my understanding of the world's ancient myths, scriptures and sacred stories, the gods in some sense actually live in men and women as well as in the realm of the gods -- which is very helpful for understanding why the surplus of the land (which is a gift of the gods) should be used to benefit the population of that land as a whole and not to enrich just a few privileged individuals or families.

Infrastructure that is provided by governments out of such taxation actually reduces the siphoning-off from the circular flow of production and consumption of goods and services. In the United States, for example, the interstate system of highways has traditionally not been covered with tollbooths every few miles (although there are some parts of the country where it has been covered with tollbooths, and more are popping up in new parts of the country all the time); the ability to use these roads without paying tolls enables the production of goods and services (whether your business involves baking bread or playing in a rock band) without bleeding out additional costs to pay tolls every time you get on or off the highways.

Extreme libertarians (and privatizers in general) would like to sell off the roads to those who would then have the right to charge whatever the market will bear to anyone who wants to drive on them. The classical economists argued that by building up infrastructure in general (including the roads, the electric grid, the water system, the sewer system, and even things like education and healthcare) and providing it without added toll-booth fees and charges, the society's ability to increase the circular flow of goods and services is enhanced. The more costs and toll-booths one erects in front of necessities such as education, healthcare, access to electricity or water, etc., the more will be diverted out of the positive cycle of flow.

Privatization essentially takes the gifts of nature (which the ancient scriptures and myths would call the gifts of the gods) and gives connected individuals, families, or corporations a license to squat in front of them with a toll booth for their own enrichment, creating a diversion from the circular flow to the detriment of the society in general. Privatization takes what comes from the gods and should belong to the people as a whole and gives it to a few connected individuals, families or corporations (who then will usually erect toll-booths on it and further detract from society at large). Little wonder, then, that the fortunes of many of the wealthiest families in the world can be traced to the privatization of their country's telephone systems, oil and gas resources, mineral treasures, and especially real estate (and in particular, real estate in locations particularly blessed with the gifts of nature, or made more desirable by the infrastructure spending of the government in the forms of roads or railroads or ports).

Professor Hudson's criticism of the Austrian economists (especially Hayek and Mises) always prominently mentions their views on the origin of money and credit itself -- because, as it turns out, money and credit can also be seen as a form of infrastructure, which can and should be provided at the lowest possible cost rather than giving certain individuals, families or corporations a license to provide it at inflated and even exorbitant costs -- thus providing a cloak of invisibility to the most lucrative privatization in the world today. In the interview above, Professor Hudson explains that public banking rather than private banking (or at least a public option alongside of private options) would be an enormous step forward for circular flow.

One of the most important aspects of Professor Hudson's work and of his arguments is his perception of the existence of deep, widespread, and institutionalized deception and obfuscation in order to defraud, oppress, and enslave -- and his perception of the use of violence as the final backstop when the "softer" weapons of deception and obfuscation fail.

In other words, he is not afraid to declare that the real problem is not that we don't know the right answers and that well-meaning people ignorantly enact bad policies -- but rather, that principles that have been known for literally thousands of years have been deliberately obscured, suppressed, and written out of the history books and the economics books in order to facilitate widespread exploitation and oppression.

Ultimately, the issue comes down to one of mind control -- and to the control of language, with which thoughts and ideas are formed and communicated. Because George Orwell was the most incisive thinker and writer to express the power of language control and of mind control, it is fitting that Professor Hudson's book opens with a quotation from George Orwell, on page 13. But, as noted above, Professor Hudson also does not shy away from the reality that those who want to privatize resources do in fact resort to brutal violence when "Orwellian" mind control efforts fall short (actually, this violence is usually accompanied by, and "excused" or "justified" by, even more intense Orwellian reality distortion efforts). He mentions a few recent and ongoing examples in the interview above, including Central and South America, Libya, and Syria -- and literally hundreds more could be listed from the past seventy years alone.

Obviously, the various gifts from nature (gifts from the gods) described above should belong to the people of various countries, to be developed by them in order to benefit their own infrastructures and thus enhance the circular flow in their own country (which will ultimately feed into the circular flow of neighboring countries and theoretically the rest of the world as well) -- and with a mind to the long-term impacts on the country and the planet itself. An especially valuable part of the interview above is the fact that privatization of large-scale infrastructure projects tends to "externalize" damage to the environment in general, because private corporations are forced by their very nature to have a short-term perspective -- whereas a government which is truly representative of the people would only be acting in accordance with its mandate if it takes a long-term view that involves not poisoning and destroying the environment and the planet itself.

I would personally recommend listening to the above-linked interview more than one time -- and then going to Michael Hudson's website to check out his other interviews, articles and books.

I would also submit that the patterns discussed in this interview and in Michael Hudson's work -- including the deliberate suppression of history and scholarship (including in the universities), the inversion of the principles taught in the ancient scriptures and traditions and practiced in the ancient world, a major break with the more-ancient ways during the rise of Rome, and the use of what can only be described as mind control and language control of the very kind that Orwell warned us about -- should be extremely familiar to readers of this blog and those familiar with the work of other researchers who have found evidence that humanity's ancient history has been deliberately obfuscated and suppressed.

I would even suggest that the inversion of the teachings found in the world's ancient myths and scriptures has been -- and continues to be -- used to assist and enable the stealthy inversion of economic philosophy that Professor Hudson observes taking place in history, going back to ancient times.

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p.s. --

For a previous essay on this subject, discussing the economic insights of Michael Hudson and pointing to the destructive suitors in the Odyssey as an example of the rentier mentality, see this previous post.